Critically examine the strategic benefits and drawbacks associated with a UK based multinational enterprise deploying parent country nationals to manage a subsidiary in a country of your choice as opposed to locally based managers. Draw upon relevant theory to substantiate your answer.
• Reading materials 2 on this site (international assignments) should provide useful background. Of course you should draw upon a wider range of sources (particularly journal articles) to answer this question in a comprehensive and analytical fashion.
• The set text (Harzing and Pinnington, 3rd edition (Sage) – chapter by Harzing and Reiche) on ‘international assignments’- or the previous edition (Harzing and Van Ruysseveldt 2nd/E (Sage) – chapter by Harzing on ‘composing an international staff’ should provide useful reference.
• The online papers on the subject of expatriation/ international assignments at www.harzing.com should also be helpful.
• As well as lecture notes, we have undertaken class based exercises group which help cast light on this question (in particular the advantages/ drawbacks of employing home country/ host country and third country nationals).
• While the question relates primarily to international staffing/ expatraition, you may draw upon international management theory as appropriate (e.g. Perlmutter) to provide greater theoretical depth.
• The general ‘rules’ of writing PG essays apply to this work- for example concerning structure and focus, using and referencing academic journals etc. articles as appropriate, adopting a reflective/ evaluative rather than purely descriptive style and spelling/ punctuation.
Please note that these points are for guidance only and you have discretion as to how to interpret/ apply them.
Staffing the Multinational enterprise- expatriation and managing across borders.
Objectives;
• To consider the strategic rationale for expatriation with reference to MNC strategies
• To investigate the concept of expatriate failure
• To examine alternatives to expatriation, notably ‘localising’ management authority to the host environment
• To identity problems and issues associated with working across cultures
• To explore the concept of ‘expatriate adjustment’
Introduction- overview and the rationale for expatriation
In this section we turn our attention more fully to international HRM, which is concerned with the strategic considerations in formulating policies affecting the staffing of parent and subsidiaries in international enterprises. In Chapter 3 we described the complexity of the parent-subsidiary relationship, suggesting that the MNC configures and reconfigures its organisational form over time in a manner that enhances its international competitiveness across national boundaries. Returning to the seminal contribution of Perlmuttter (1969) in the first, ethnocentric, phase of development, multinational operations would typically be run by the parent in a centralised fashion, with little need for meaningful interaction between parent and host country managers and other interested stakeholders. However, in subsequent poly and geocentric phases, or in Adler and Ghadar’s (1990) international, multinational or global configuration, when the subsidiary becomes a critical player in the realisation of international corporate goals, real cross cultural engagement between home and host country staff develops in strategic importance and IHRM issues are closer to the forefront of corporate deliberations. As a starting point, therefore, for considering international staffing we should note that it is not founded on a unidirectional notion of direct parental control over subsidiaries via expatriation, but rather on a complex and variable set of interrelationships between human agents in home and host environments which are conditioned by the overall strategic orientation of the MNC.
Expatriation has occupied a pivotal position in the IHRM literature in representing the most direct form of human resource intervention by the parent into the operations of subsidiaries. According to Harzing (2004) an expatriate may typically be defined as a parent country national (PCN) working in foreign subsidiaries of the MNC for a pre- defined period, usually 2-5 years. A recent survey by GMAC ( 2007), covering 180 small, medium and large scale organisations from a variety of sectors, including information technology, pharmaceuticals, construction, chemicals and finance, and managing a worldwide employee population of more than 8.4 million, sheds light on the current state of expatriation. This may be exemplified by the following facts;
• 34% of responding companies deployed 50 or fewer expatriates, a high percentage of respondents (56%) deployed over 100 expatriates
• 69% of respondents reported the number of expatriates to have increased in 2006
• 20% of expatriates were female
• 48% of expatriates were 20 to 39 years old
• 60 % of expatriates were married and 54% had children accompanying them
• Spouses/ partners accompanied 82% of expatriates. 59% of spouses were employed before an assignment and 8% during an assignment
• 10% had previous international experience, 14% were new hires and 86% were employed by the company at the time of the international assignment
• 58% were relocated to or from the headquarters country
• The US, UK, China and Germany were the most frequently cited destinations
In an in depth investigation into the corporate rationale for expatriation, Edström and Galbraith (1977) identify three main company motives for international transfer. Firstly, international companies may despatch expatriates in order to fill positions where indigenous knowledge and skills are not available. Deploying expatriates as agents for the transfer of knowledge may be particularly significant for subsidiaries in developing countries. Secondly, expatriation may occur for management development purposes. In this instance, experience accumulated through international transfer will equip the expatriate for career progression within the organisation. Thirdly, expatriation can assist with organisation development through establishing personal channels of communication between parent and subsidiary and through facilitating the diffusion of corporate norms and values throughout the international organisation, thus promoting a common corporate culture. (Caligiuri and Di Santo, 2001, McCall and Hollenbeck, 2002). The observations of Edström and Galbraith are borne out in the GMAC survey (2007), which finds that the most common assignment objective was to fill a skills gap (27% of respondents) followed by building management expertise (23%) and technology transfer (18%).
At a more strategic level of analysis, Colakoglu and Caligiura (2008) assert that expatriates are deployed in order to influence the performance of subsidiaries as a result of the strategic leadership positions they occupy, the knowledge from headquarters that they transfer and their potential for ‘boundary spanning’ between headquarters and host subsidiaries (Edström and Galbraith (ibid), Bonache and Brewster, 2001). Expatriates may therefore perform a vital function in facilitating the ‘outward flow’ of knowledge, skills and practices from the home to the host unit, and also the ‘inward transfer’ from subsidiary to parent (Riusala and Suutari, 2002). Expatriates are engaged in the ‘cultural control’ of subsidiaries, which involves the dissemination of corporate values and norms which powerfully determine the organisational context for work processes and behaviours (Balgia and Jaeger, 1984). In asserting cultural control expatriates may directly control subsidiary operations by constituting a ‘mini- headquarters’ in the host environment, or may exert more indirect influence through encouraging subsidiary employees to adopt corporate norms and values, this being based on processes of ‘education’ and ‘socialisation’ (Harzing 2001). According to Colakoglu and Caligiura (ibid), the greater the degree of ‘cultural distance; between parent and subsidiary environment (note cultural theories in chapter 2), the greater the need for expatriate cultural control (Balgia and Jaeger, ibid, Boyacigillar, 1990, Kogut and Zander, 2003).
While the ‘strategic mission’ is performed by an elite group of expatriates, it should be borne in mind that not all international assignments require the pursuit of such elevated corporate objectives. Caligiuri and Colaglu (2007) assert that the purpose of staff deployment maybe primarily functional (i.e. carrying out an assigned task in the field of finance, marketing, human resources etc.) or technical (e.g. providing technical advice relating to systems, software, etc.). The latter two forms of assignment are clearly less demanding in terms of the requirement for cross- cultural proficiencies and skills.
While MNCs continue to place considerable reliance on expatriation as a critical mechanism for international co-ordination and control, Black and Gregerson, (1999) in a wide-ranging and critical review, reveal that few MNCs reap the expected returns of overseas deployments due to poor expatriate practices (Verbeke, 2009). In a survey of nearly 750 US, European and Japanese firms over a decade, including the views of expatriates themselves, Black and Gregerson (ibid) find that eighty percent of all mid to large size MNCs send managers abroad at a significant cost to the company, with full packages costing two to three times the average equivalent domestic position. These authors found that;
• Ten to twenty percent of US expatriates returned home early due to dissatisfaction with their overseas assignment and difficulties in cultural adjustment.
• The performance of more than thirty percent of expatriates that remained in their overseas posting did not senior management expectations.
• For those who completed their assignments, over one quarter left the company within a year of their return.
• More than thirty percent of expatriates were still in temporary positions within three months of returning home.
• Over three quarters experienced demotion and reduction and job discretion on return home.
• Over sixty percent found that there was little or no opportunity to apply or leverage the knowledge they had acquired overseas on return to headquarters.
It is perhaps awareness of the high emotional and financial stakes associated with expatriation that leads many potential international assignees to resist a career move overseas (Dupuis et.al. 2008).
The risk of expatriation and international staffing alternatives
Expatriate failure
Despite its continuing popularity as a method of international staffing, it is undoubtedly the case that expatriation carries with it significant risks, both to the company and to the transferee him or herself. A subject of considerable debate by researchers has been the risk of failure. Expatriate failure is normally defined as the premature return of the expatriate to the home base prior to completion of the agreed term. The GMAC survey (2007) reveals, however, that early return does not always signify failure, as 14% of prematurely returning respondents successfully completed their assignment early, and 23% returned to take up a new position in the parent company. Harzing (1995) contends that there are widely varying estimates as to the proportion of failed expatriate assignments in developing countries (ranging from 16-50%), the estimates at the middle to higher end of this spectrum being questionable. The GMAC survey (2007) finds that 10% of expatriates returned prematurely, major explanations for this being partner dissatisfaction, inability to adapt to the host environment, family concerns and poor candidate selection. The survey found that China, the UK, the US and Japan were the locations with the highest rate of assignment failure. Despite disagreement over the precise extent of expatriate failure, it is undoubtedly the case that it is a problem worth taking seriously. From the company’s point of view, the significant costs associated with expatriate recruitment and training are forfeited, while a more ‘invisible’ cost is continuing underperformance as each new expatriate embarks upon the lower end of a ‘learning curve’.(Lee, 2007). The company will also accrue costs in continually replacing failed international assignees.
From the expatriate’s point of view, failure may be associated with reduced career prospects in the company, financial loss, lowering of morale, and there may also be detrimental effects on partner and children if they are accompanying the expatriate. Lee (ibid) suggests that a significant explanation for expatriate failure was a deficiency in the relational capabilities of international assignees (including cultural sensitivity, personal and emotional maturity, adaptive capacities in a new environment), this being exacerbated by a tendency by both companies and expatriates to concentrate upon the technical aspects of working overseas.
Strategic alternatives to expatriation
In order to avert the risk of failure, the need to prepare the expatriate for cross cultural engagement through training and development programmes is increasingly being recognised. However, following from our previous analysis of various multinational strategic and structural formulations, it is not always the case that a ‘traditional’ expatriate is needed, and therefore it makes sense for the international company to consider alternative methods of international staffing. Briscoe and Schuler (2004;223) note that ‘the tradition of referring to all international employees as expatriates- or even international assignees- falls short of the need for international HR practitioners to understand the options available..’.
Following these authors, Zimmerman and Sparrow (2007) identify the following types of international assignees; parent country nationals, host country nationals, third country nationals, international commuters, employees on short- term or intermediate foreign postings, permanent transferees or permanent cadre, international transferees (moving from one subsidiary to another), immigrants, returnees, contract expatriates, or virtual international employees in cross-border project teams.
The GMAC survey report (2007) finds that 55% of companies were seeking alternatives to long term assignments, the major reason for this being cost. For those companies endeavouring to move away from traditional expatriation, 36% used short term assignments, 14% localised expatriates and 13% of business travel. As we shall investigate in chapter 5, as well as being a risky business, traditional expatriation is frequently also expensive as companies need to provide incentives for staff to undertake overseas assignments, and to retain a coherent package which reflects home payment criteria in the host environment. Regarding cost, therefore, both the options of shorter term assignments (in which home country rates are paid with few extras) and permanence or localisation (in which host country rates may be paid) offer attractive alternatives to traditional expatriation. Shorter international assignments also carry the quite considerable benefit that relocation will not be necessary for the partner or spouse of the expatriate and children.
Devolving to the subsidiary
However, the model of traditional expatriation is perhaps most under threat from a realisation of the strategic benefits associated with international devolution, or staffing senior positions in the subsidiary with host country nationals, this complying with Perlmutter’s (ibid) notion of polycentricity. Harzing (2004) asserts that host country managers can contribute invaluable resources of locally based knowledge to international companies, appertaining to socioeconomic, political and legal circumstances as well as business practices in the host environment. Furthermore, as Harzing points out (ibid) devolution of managerial authority to host country managers (HCNs) can respond effectively to the host government’s demand for localisation of subsidiary operations, and provides a motivational stimulus to local managers who perceive opportunities for promotion and advancement.
While the deployment of PCNs in subsidiaries manifests a country of origin ‘dominance effect’ in international staffing, the employment of HCNs, according to Gaur et. al. (2007), helps a subsidiary conform to local laws and gain knowledge of the local environment. The employment of HCNs is likely to be an important factor in promoting the local legitimacy of MNCs, and can signal that the MNC is providing benefits to the local economy (Gaur et. al. (ibid). The deployment of local managers may provide for greater continuity and reliability in the staffing of subsidiaries.
Brown (2008) reports that a number of MNCs are recognising the benefits, in terms of cost and skills, of employing third country nationals (TCNs). This group may be defined as internationally mobile staff whose origins are neither the home country of their employer nor the country of assignment. TCNs are enlarging the candidate pool for international assignments, constituting 35% of expatriates in a study of 181 companies operating in 130 countries (GMAC, NFTC and SHRM, 2002). The increased sourcing of international ‘talent’ particularly from developing countries including India, China and Russia, signifies an internationalisation of recruitment approaches in MNCs. This grouping, which constitutes neither home or host country nationals can fill corporate deficits in skills or knowledge which are not available within the existing reservoir of human resources, and may be in an optimal position to combine technical proficiency with cross-cultural sensitivity.
As a concomitant of international devolution, MNCs have become aware of the advantages of inpatriation as a strategic alternative to expatriation. Inpatriation involves the organisation of secondments for subsidiary managers in the parent’s headquarters for a particular period of time. Subsidiary managers may gain from this experience by actual exposure to norms, values and ‘state of the art’ knowledge in the parent, as well as being able to establish informal communication networks between subsidiaries and parent (Harzing, ibid). Similarly, according to Briscoe and Schuler (ibid) host country nationals who have been exposed to international state of the art knowledge represent a scarce resource for MNCs, as they are able to combine such knowledge with local awareness. Thus Japanese high technology MNCs have seen the benefits of employing ‘boomerangs’ (Pacific Bridge International Asian HR ,2003), this category of international staff typically comprising Japanese knowledge workers who have migrated to western countries, but are tempted to return home as they possess the necessary language and cultural skills to navigate the complex local business environment (Briscoe and Schuler, ibid).
Working across cultures
As the strategic configuration of the MNC develops to embrace the subsidiary as a vital contributor to its international operations, so the need for interaction between home and host country managers at an interpersonal level is likely to increase. Referring to institutional and cultural perspectives explored in Chapter 2, it can be appreciated that organisational mindsets, and general attitudes towards ‘doing business’ may be grounded in highly diverse national or regional traditions. So, for example, taking an institutional perspective, a US manager has lived and worked in an environment in which ‘freedom to manage’ has been paramount, while such a manager’s French counterpart is used to numerous aspects of managerial activity being subject to statutory regulation. From a cultural perspective, the US manager, according to Hofstede (1994) has been profoundly conditioned by an individualistic organisational mindset, while his or her French equivalent, while valuing individualism, is strongly orientated towards the avoidance of uncertainty. It is therefore apparent that management across cultures carries with it greater potential for complexity and ambiguity than managerial interaction within cultures. Accordingly, a critical challenge confronting not only expatriates, but all those involved in international managerial engagement (Brewster et al 2007), is the need to operate effectively in diverse international teams. Hodgetts and Luthans ( 2003) suggest the following potential problems with diversity;
• Mistrust- Difficulties in understanding ‘alien’ modes of interaction and business customs (for example US managers’ bewilderment at Japanese managers ‘huddling together’ and discussing a problem in their own language in an international business meeting. Different perceptions of hierarchy, for example between high power distance orientated French managers and low power distance French managers may also confuse deliberations between managerial groupings from these nations (Hollinshead and Leat, ibid)
• Stereotyping- Culturally rooted preconceptions and prejudices concerning international colleagues. An example might be the western perception that post-socialist managers are collectivist in orientation, however contrary evidence exists of highly individualistic tendencies (Hollinshead and Michailova (2001))
• Inaccurate communication- This refers not only to potential problems of translation, but also because of etymological problems in establishing the meaning of words and terminology. For example the term ‘Human Resource Management’ has no literal equivalent in many East European countries. Difficulties may also arise from the misinterpretation of ‘body language’ and idiosyncratic mannerisms across cultures.
• Different perceptions and uses of time- This may refer to punctuality in attending meetings, preparedness to commit to an agreed course of action during a meeting, and to the scheduling of agreed tasks resulting from an international business encounter.
On the other hand, it has been acknowledged that internationally diverse teams potentially offer considerable HR related benefits to the MNC. Indeed, Shapiro et. al. (2002) suggests that multicultural teams tend to operate at extreme ends of the spectrum of high and low performance, while Adler (1997) argues that the productivity of diverse teams depends upon how they manage such diversity. Following Hodgetts and Luthans (ibid) multicultural or diverse teams offer advantages over homogenous managerial groupings in the following scenarios;
• Where innovative or creative ideas or solutions are required. As group members come from a host of different cultures, they are often able to create a greater number of unique suggestions.
• Where there is a need to avoid ‘groupthink’. This phenomenon relates to the tendency of a homogenous ‘in group’ to conform to established patterns of consensus and group norms, and to discredit ideas which run against compliant thinking and behaviour.
Case Scenario- Western expatriates in Moscow
Since the early 1990s, Russia has become more integrated into the wider international economic community , western interests being fully aware of the huge market potential it offers as well as local reserves of knowledge and skills which may be accessed through the formation of ‘East/West’ strategic alliances or joint ventures. The emergence of a new generation of young ‘market orientated’ (Puffer, 1996) managers in Russia, who are familiar with the ‘repertoire’ of international business, and who possess formidable language and technological skills has apparently contributed to the construction of an interpersonal ‘bridge’ from western countries into the former Soviet territory, promoting the real possibility of collegiality in business dealings and meaningful intercultural exchange.
However, beneath the ‘veneer’ of camaraderie between western and eastern managerial participants in new alliances lurks deeply rooted mutual suspicion which hinders effective cross- cultural working and which requires adjustment on both sides to the new climate for doing business in the ‘new’ Russia. The ‘crossed- wires’ which continue to blight communication and interaction between western and Russian groupings may be attributed to contrasting forms of socialisation to which they were subject to in capitalist and communist structures. Contradictory and dysfunctional sentiments may be witnessed on matters such as adjustment, orientation to work, ethics and knowledge and skills issues, as the following quotations bear out;
On adjustment;
Western manager;
‘It’s obviously better to start the way to you mean to continue, the problem is that when you come to Russia for the first time, you really cannot imagine the situation, and as a result, you either sink or swim. If you want to swim, you really have to understand how to communicate in a way which is understandable- from how you should show gratitude to being firm’
Russian manager;
‘We need to understand what the priorities are. This is very clear to Westerners because they are working in their own system, it’s not clear to us because capitalism is very new to us… it is very important to know what the consequences are for certain actions or non achievement of tasks…we are playing a new game and the rules need to be explained clearly’
On orientation to work;
Russian manager;
‘In Russia we use the word ‘collectiv’ which refers to the group or team. It’s similar to communist ideas of community. We Russians still use this word to refer to workplace, group of friends and other groups. We can’t get away from the idea of the ‘collectiv’ which is like a big family- and that’s why, when we go to work, we share all our problems and probably even dress as if we are going to see friends.’
Western manager;
‘ A Russian will change jobs for a difference of 50 dollars a month… Russian employees are purely money driven, there is such a contrast to how other nationalities make their choice about the place of work. It’s incredible, it’s all about money.’
On ethics
Russian manager;
‘…you can compare the arrival of Americans to the gold rush in America in the last century… the word exploitation comes to mind’
Western manager;
‘there is more willingness and greater tendency (by Russians) to be dishonest’
Russian manager;
‘Westerners use their connections to further their careers and business purposes, their connections are the people that they know. In Russia, it’s quite different. We look for someone who knows someone whom we could pay to help us.’
‘ There is a feeling that Russians are being treated as second- class citizens. They are paid much less than the expatriates, who, in addition, have large living allowances, live in better accommodation than Russians and frequently have a chauffeur’.
On knowledge and skills issues
Western manager;
‘…Russian managers are young and very open to learning and being trained… we are very lucky because we work with an elite section of the Russian population.’
Russian manager;
‘…We (Russians) are chauvinistic. We were taught that we are the best and I think that deep down we still want to believe this story…I think it’s insulting for Russians when westerners think they know more about Russia, especially when they know so little.’
It is clear from the above quotations that unleashing higher levels of commitment to international enterprise in Russia is conditional upon entering a more positive cycle of mutual engagement, calling for learning and unlearning capacities on all sides. For westerners, not only is there is a need to become more immersed in Russian culture both at home and at work, but also there is a need to be sensitive to the negative symbolic effect of overt expressions of inequality. If there is to be an optimal sharing of local and international knowledge in joint ventures, then priority needs to be attached to the intricacies of relationship building.
It is becoming incumbent on Russian managers to adapt their behaviour to meet the requirements of the rapidly changing circumstances around them. They are being required to empathise with, and absorb ‘western’ visions of organisational purpose, thinking in a less domesticated and more international fashion, and developing ‘soft’ skills such as the ability to delegate and motivate others.
Source; Camiah, N. and Hollinshead, G. (2003) ‘Assessing the potential for effective cross-cultural working between ‘new’ Russian managers and western expatriates’ Journal of World Business, 38(3) 245-261
Expatriate adjustment
The case scenario above identifies the difficulties expatriates may face when undertaking an overseas assignment. The western expatriates experienced a degree of ‘culture shock’ and were challenged by the need to adjust, or achieve comfort in a new environment. Adjustment therefore denotes the psychological change induced in individual by a move to an unfamiliar cultural environment (Black et. al,, 1991, Bhaskar- Shrivinas et. al.,2005, Ogri, 2009). More broadly, Hippler (2006) conceptualises adjustment as the general satisfaction with one’s life in the new environment, while Aycan (1997) refers to the degree of fit between the expatriate manager and the environment, both work and socio-cultural. Varner and Palmer (2005) affirm that inadequate adjustment is likely to be at the expense of effective job performance.
According to Zimmerman and Sparrow (2007) the adjustment process can be broken down into three facets as follows; psychological adjustment (changes of psychological and emotional states characterised by feelings of well-being and satisfaction; interaction adjustment (the individual’s behavioural and attitudinal changes with regard to intercultural interactions characterised by the ability to ‘fit –in’ and ‘negotiate’ interactive aspects of the new culture) and work adjustment (changes in reaction to the new job). In a new departure, but reflecting adjustment processes observed in the foregoing case scenario, Zimmerman and Sparrow (ibid) characterise adjustment as involving mutual psychological and social movement by members of international teams as opposed to unidirectional mind- set shifts on the part of expatriates (Zimmerman and Sparrow, ibid).
In an influential model, which has significant implications for the selection and training of expatriates, Black, Mendenhall and Oddou (1991) distinguish between anticipatory adjustment, i.e. those factors that will facilitate effective expatriation prior to departure and in country adjustment, i.e. factors relating to work, interaction with host country nationals and coping with living conditions in general, that will determine success following arrival in the host environment.
Anticipatory adjustment is concerned with the determination of accurate expectations on the part of expatriate, thus minimising the risk of culture shock (Harzing, 2004). Significant anticipatory variables relate to the accumulation of previous experience by the expatriate in foreign assignments, the selection criteria and mechanisms adopted by the organization in identifying a suitable expatriate, and the level and appropriateness of technical and cross-cultural training provision in advance of the assignment.
Turning to in- country variables, the model is premised on the notion that effective adjustment will depend not just upon job related factors, but also is influenced by behavioural characteristics of the expatriate him or herself, including the ability to develop relationships, and is critically determined by non work factors. In terms of personal orientation, a key attribute is ‘self- efficacy’ which is associated with the ability to learn from mistakes, and to regard inevitable set- backs as learning experiences. Such an attribute will be helpful when an individual is experiencing ‘culture shock’ in the first stages of an assignment, and is conducive to the acquisition of meaningful, self generated, learning in an unfamiliar environment.
Inevitably work itself will contribute to successful expatriation, important variables relating to the clarity of the job role, the level of discretion enjoyed, the newness of portfolio of tasks and the degree to which conflict is experienced in the job role. Of course, the job is located within a broader organisational setting, in which the conduciveness of the organisational culture and the ability of the expatriate to draw upon social support, represent significant contributors to success.
Finally, non work factors relate to the ability of the expatriate, and his or her spouse and family, to relate to the practicalities of life in the new environment. This may relate to housing, transport, food, cultural amenities, schooling, medical care, and the availability of employment for the ‘trailing’ partner. It is suggested by the authors of the model that the organisation can assist in providing logistical and other support to assist with non work factors.
The model also incorporates the notion that ease of adjustment is determined by the degree of cultural proximity or distance between home and host environments, thus corroborating a view that certain destinations are more challenging than others for western expatriates. Shaffer et.al. (1999), in an empirical testing of the model, re-affirm the importance of job design and organisational support systems. These authors, however, also stressed the significance of inclusion of the spouse in training and support programmes and language fluency as a selection criterion.
Black et. al.’s model has contributed to the theory and practice of expatriation by stressing the significance of pre- departure and post –arrival experiences in determining successful adjustment, as well as work and general ‘life’ factors. Nevertheless, the model has not remained beyond criticism. Halsberger and Brewster (2007) in postulating a ‘six adjustment domain’ alternative, assert that factors such as social relations which focus on the establishment of networks, neighbourhood, contacts and friendships should be given greater priority. In general, critiques have argued for a more behavioural approach to be taken to explain success in adjustment, emphasising individual and emotional ‘fit’ with circumstances in the host environment.
De Cieri et.al. (1991) have provided insight into the subjective experience of expatriation, mapping the phases of adjustment over time in graphical form. According to these authors, psychological reactions to an assignment occur in three main phases as follows;
• Phase 1- tourist- is associated with mixed emotions, including excitement, fear of the unknown, anxiety and sense of adventure. On arrival in the host country, there may be a short term experience of enchantment and unreality, this being referred to as the ‘honeymoon’ period. However, as the realities of everyday life in the new location become apparent a downswing in mood may occur, promoting a feeling of crisis. (Dowling and Welch, 2004)
• Phase 2- crisis- may determine the success or failure of the assignment, depending upon how the individual copes with the realities of living and working in a new environment. It is likely that ‘self- efficacy’ is a vital attribute during this stage, the expatriate demonstrating an ability to learn from adverse experiences and to formulate positive coping mechanisms.
• Phase 3- pulling up- assuming the individual successfully weathers phase two, this is a time of recovery and emotional stabilisation.
• Phase 4- adjustment- represents a healthy recovery and integration into the new environment. As Dowling and Welch (ibid) note, however, return home after experiencing this phase may require further adjustment on the part of the expatriate.
The ‘models’ of adjustment offered by Black et.al. and De Ciera promote vital understanding of the range of factors promoting expatriate adaptation to host countries, Each of these approaches, however, arguably runs the risk of stereotyping, over- generalising and ‘normalising’ adjustment phenomena which in practice are characterised by their variability and unpredictability, depending upon the organisation in question, the particularities of home and host environments, and the idiosyncrasies of the expatriate and his or her immediate relations (Halsberger and Brewster, ibid).
Referring to the case scenario- Western expatriates in Moscow above, consider
• How does cultural theory (Hofstede and others) help us understand the problems in cross- cultural working between the two international management groupings forming the subject of the study?
• What should be the essential features of an expatriate training programme designed to assist the western expatriates adjusting to life and work in Russia?
• How do you interpret the motivation of the Russian managers? How might this be improved?
• Are there any useful lessons from this study for international joint ventures in general?
Summary
This chapter has explored the staffing implications of organising across national boundaries. It has suggested that, while expatriation remains a common HR mechanism for the exertion of parental influence on the subsidiary, various cost effective and less risky strategic alternatives exist, including the devolution of decision making authority to local managers. We have also investigated the organisational complexities of international team working, suggesting that multi-cultural management may be hampered by mistrust and miscommunication, but also offers the possibility of creativity and innovation. Finally we have considered the factors contributing successful expatriate adjustment in the host environment, an adjustment model forming the basis for recruitment and training approaches to international staffing.